2 Implementation of national initiatives
5. The Department has used a number of central initiatives
to influence local hospital productivity including: national pay
contracts; a national tariff system for paying for hospital services
('Payment by Results'); and the sharing of innovation and good
practice.[13]
6. National pay contracts have not yet been used
effectively to drive productivity. The Consultant Contract was
put in place in 2003 with an expectation that it would deliver
year-on-year productivity gains. Yet, while consultants have had
significant pay rises, their overall productivity has consistently
fallen.[14] The Department
explained that this reflected a wider trend in the developing
world as consultant specialisms narrow.[15]
However, few hospitals have used the available contract levers,
such as job planning to improve productivity.[16]
Agenda for Change contracts, which cover pay for the majority
of other hospital staff, are also designed in part to deliver
productivity improvements, but are not yet being consistently
used across hospitals to manage staff performance effectively.[17]
7. In general, the national focus on quality of care
has meant that clinical staff have not been performance-managed
with regard to the cost or efficiency of their activities. Few
hospitals have used staff appraisal systems to demonstrably improve
productivity.[18]
8. The Department promotes efficiency and productivity
improvements in hospitals through setting a fixed price, or national
'tariff', for individual hospital procedures. While Payment by
Results does seem to have driven some improvements, the system
only covers 60% of hospital activity and there is substantial
variation in hospital costs and activity.[19]
The Department is introducing 'best practice tariffs', moving
away from an average price, to promote greater hospital efficiency.
However, if tariffs are reduced, there is a risk that, were there
to be increased price competition, this might reduce the quality
of service, or hospitals may decide not to provide some services.[20]
13 C&AG's report, paragraph 2.1 Back
14
Qq 17, 28; C&AG's report, Figure 5 Back
15
Qq 55-57 Back
16
Qq 19-22, 24 Back
17
Q 77 Back
18
C&AG's report, paragraph 10, Q59-60 Back
19
Qq 94, 98 Back
20
Qq 99 - 108 Back
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